India–Nepal Relations: Post-2014

Foreign Policy Research Center Journal interview with Sanjay Upadhya

1. How does Nepal look at India’s ‘Neighborhood First’ Policy post-2014?

Nepal welcomed Prime Minister Narendra Modi’s election in 2014 as a harbinger of change in bilateral relations. Over the months, Mr. Modi overtures – rhetorical as well as real – reinforced Nepali perceptions of the advent of a positive era. The economic blockade India imposed the following year changed all that. If India had any legitimate reservations on the content of Nepal’s new constitution as well as the nature and direction of Nepal’s growing relationship with China, New Delhi could have chosen to address them through proper diplomatic and political channels. To this day, the Nepali people do not know much about India’s grievances.
That India used an agitation launched by Nepali Madhesi leaders for greater internal autonomy to camouflage its imposition of a wholesale economic blockade for months on only served to validate Nepali perceptions of the enduring nature of the divide-and-rule policy India had inherited from the British Raj. Moreover, the fact that the blockade came merely months after Nepal suffered a devastating earthquake only hardened Nepali sentiments. The blockade has left Nepal in a cautious wait-and-see mood vis-à-vis any Indian initiatives such as ‘Neighborhood First’.

2. How does India look at Nepal’s foreign policy – From ‘looking at India’ to ‘backing up China’?

China’s growing assertiveness in Nepal is an undeniable reality. It is also true that Nepal continues to use its relations with China to balance India – sometimes too flagrantly. Today Nepal is ruled by a Communist Party formed recently by two factions sharing a pronounced Maoist legacy, which is new experience for the country. Nepali opposition parties regularly caution the government against tilting to the north out of sheer ideological fealty. It would be wrong, however, to view official Nepali policies and pronouncements as an outgrowth of some collective national strain of anti-Indianism.
In 2006, India played a major role in facilitating the alliance between mainstream democratic parties and the Maoist rebels to restore peace after a 10-year ‘people’s war’. Yet Chinese engagement in the economic, social and cultural spheres of Nepal has grown precipitously since 2006. While the causes and consequences of China’s expanding footprint in Nepal precisely during this period continues to be studied extensively in Nepal and India, there has been a natural political impact of Beijing’s active engagement. We cannot keep dwelling on the supposed ease with which Nepal flashes the China card against India at every opportunity without trying to understand the real compulsions that may lay behind Nepal’s recent policies and pronouncements.

3. Do you agree that India’s effort to revitalize BIMSTEC is signaling that its foreign policy is now shifting to address the reservations of its neighbours?

Nepal looks forward to the revitalization of BIMSTEC as a new dimension of regional cooperation for collective prosperity. The eastward shift of the locus to include new partners certainly brings new opportunities for Nepal. At the same time, there is a feeling in Nepal that BIMSTEC may be evolving in a way that would supplant the South Asian Association for Regional Cooperation. Nepal is fully behind the notion that bilateral issues, such as those between India and Pakistan, must not be allowed to hold back regional cooperation. However, it also recognizes the limits that could be imposed by overtly exclusionary efforts. SAARC and BIMSTEC are antithetical entities and should not be considered as such.

4. Why did Nepal prefer to be neutral during the Doklam standoff in 2017?

From Nepal’s perspective, the Doklam standoff was a symptom of the larger border dispute between India and China. New Delhi and Beijing have wisely decided not to let their long-running border dispute prevent cooperation in other mutually beneficial areas. Yet Nepal cannot be oblivious to the possibility of periodic India-China border flare-ups pending a formal and final settlement between the two countries. More importantly, Nepal recognizes the direct and dire implications of such tensions given its own precarious position between the two giant neighbors. As such, Nepal needs to maintain extreme judiciousness in its approach so as to do no further harm. Neutrality on Doklam was guided by Nepal’s national interest.

5. India bashing is still a favorite sport with most Nepalis who blame New Delhi for most of the ills in their country little knowing the dynamics of relations between both countries. Do you subscribe to this viewpoint?

This has been a long-standing trait in Nepal because of the rich political value it produces domestically. However, a shift in Nepali public opinion is also becoming palpable in recent years. There is growing recognition that Nepal must engage more constructively with India on all contentious issues and shun grandstanding in order to sustain a mutually productive relationship. Over the last decade, increasing contacts with China in different areas have allowed Nepal to compare and contrast its relationship with each neighbor. There is growing appreciation of how geography, culture, politics and language bring Nepal closer to India as well as the advantages they offer. History and geography as well as the realities of the modern world have taught us that Nepal-India and Nepal-China relations cannot and need not be mutually exclusive.

6. Do you believe transforming the India-Nepal border from an ‘open border’ to a ‘closed border’ would severely damage the traditional socio-cultural ties?

I do. More than that, I am not sure Nepal can sustain the short-term costs closing the border would entail – or even whether the costs would be short. Nepalis recognize the benefits accruing from an open border with India very well because they are living it every day. In a spirit of true reciprocity, Nepal should address the political, security, economic and diplomatic concerns of India as far as practicable to maintain what I believe is a basic underpinning of our vital relationship.

7. What are the existing security relations and strategic perceptions of India and Nepal? What are the reasons for the erosion of mutuality and its impact on Indo-Nepal relationship?

Theoretically, at least, the key underpinnings of a robust security relationship between Nepal and India are in place. Concerns on both sides relate to implementation of those commitments. Each country has grievances over the safe haven criminals and questionable characters enjoy on the other side of the border. As far as Nepal is concerned, India may perhaps pause to consider whether lack of action on the part of Nepali authorities is deliberate or is rooted in administrative and police weaknesses. This is not to deny the existence of malicious motives behind certain cases.
On contentious cases, India could approach Nepal on a case-by-case basis. Definitional gaps relating to criminal activities need to be handled through legal and judicial institutions.
Similarly, the strategic perceptions of each country are defined by realities based on their sovereign existence. The erosion of mutuality is rooted in the tendency on both sides to attribute every instance of inaction, hesitation and deliberation to some deep-seated antipathy toward the other. However, I do see signs of change for the better on both sides. One is that India and China have become more aware of the potential of third countries engaged with Nepal to disrupt the stability of what is emerging as a vital triangular Sino-Indian-Nepali relationship. Of course, there is a vast distance between recognizing something and doing something about it. Still, this realization could provide a sound basis for positive action for all three countries to usher in a phase of peace and prosperity in the region.

8. Indian army chief General Bipin Rawat says Nepal and Bhutan cannot delink from India due to geography, cautions countries against China’s aid. Do you agree with this statement?

There is little to quibble with the first part of Gen. Rawat’s statement. The second part is problematic on at least two counts. First, any decision on whether to accept Chinese aid has to be made by Nepalis themselves. Second, Gen. Rawat’s caution comes from his specific and specialized vantage point, i.e., the Indian military, which is but one dimension of relations between states.
Nepali decision-makers and the public are aware enough of the global debate surrounding costs and benefits of Chinese assistance. Nepalis are equally aware that China, like India, is a sovereign and independent country that makes decisions based on its values, attitudes, needs and expectations. Based on a careful assessment of relevant considerations, Nepalis should be free to make decisions. Of course, Nepalis should listen to the views and perspectives of people like Gen. Rawat in a spirit of utmost goodwill.

9. The proposed China-Nepal railway is expected to be game-changer. Nepal’s hope is that apart from new trading opportunities, the railway will offer a crucial lifeline against potential Indian blockades. Do you agree?

The China-Nepal railway has been a promise dating back to the first meeting between King Birendra and Chairman Mao in the early 1970s, when it was a technical improbability. Even though the idea is becoming more feasible, Nepalis have gradually come around to realizing the futility of hyping it without at least gaining a vague idea of when it might eventually come into operation. From most accounts, the project is still in the technical feasibility phase. Then there are questions of funding. Furthermore, we need to know what those trains will carry into Nepal and how those commodities and products will eventually be priced and whether Nepalis can afford them as an alternative to supplies from India.
Yes, there are people who think the Chinese railway will offer a crucial lifeline against potential Indian blockades. Even if that were true, I think such a focus would be misplaced. We need to deploy our collective efforts to conduct Nepal-India relations in an atmosphere of mutual trust and goodwill so as to preclude future blockades.

10. Prime Minister Narendra Modi during his May 2018 visit said India-Nepal relations are like those of a family and that misunderstandings were now over. However, India remained silent on exchanging banned Indian notes parked in various financial and banking institutions and held by general people. Any prospects of solution to this problem?

From media accounts and public pronouncement of key Indian political figures, it seems India has realized that the blockade was a mistake. Nepali leaders, too, while periodically raking up the issue of the blockade, recognize the imperative of turning a new page. On the issue of banned Indian notes, it looks like both governments have decided to address the issue quietly.
The political process facilitated by India in 2006 eventually abolished the monarchy two years later and ushered in a political order that – at least, theoretically – has broadened popular political participation and inclusion. Perhaps as an unintended consequence, it has also created strategic ambiguity as a multiplicity of actors such as the European Union and the United States are active alongside India and China, sometimes at cross-purposes. Amid growing disenchantment with the government and even the political order, many Nepalis are watching whether Prime Minister Modi’s second term will see any significant change in India’s Nepal policy.

FPRC Journal, 38-2019(2), Foreign Policy Research Center, New Delhi, 2019.

Nepal: Stabilizing A Soft Strategic Triangle

By Sanjay Upadhya

With the dust still swirling on the path Chinese President Xi Jinping tread during his 22-hour state visit to Nepal earlier this week, the international reaction is all over the place. From one set of headlines, you would be forgiven for believing that Xi just pulled the geostrategic locus of the world’s newest republic – ruled by democratically elected communists – northward.
From the other set, you could hardly be faulted for wondering how Kathmandu mustered the courage to snub Beijing by so brazenly refusing to sign extradition and defense treaties. In an age of extremes, such tension acquires additional news value.
The reality, though, lies somewhere in the middle.
While Xi’s visit was long on pomp and ceremony, it was also the first visit by a Chinese president to Nepal in 23 years. Kathmandu was the last South Asian capital Xi chose to visit since assuming the presidency six years ago. (Bhutan, which is under India’s tight overlordship, does not qualify yet as a destination for a Chinese president.)
Nepal’s plight was a far cry from the proximity it enjoyed with China under Mao Zedong, Deng Xiaoping and Jiang Zemin. While Mao never went abroad barring two trips to the Soviet Union, his premier, Zhou Enlai visited Nepal twice. In early 1978, Deng made Nepal as part of the itinerary of his first foreign visit since his return to power in post-Mao China. President Li Xiannian visited in 1981, which Jiang arrived in 1999.
A significant fact is that Xi landed in Kathmandu after holding an informal summit with Indian Prime Minister Narendra Modi in southern India. Although Beijing and New Delhi remain tight-lipped on the place Nepal occupied in the bilateral agenda, post-visit comments in both capitals have spoken of a new era of trilateral cooperation between China and India and Nepal.
Nepali Prime Minister K.P. Oli affirmed his government’s support for the Belt and Road Initiative more cogently, a decision widely seen as having been reached in consultation with New Delhi. Despite India’s own reservations on the ambitious Chinese project, New Delhi recognizes the value of Beijing-built infrastructure that would bolster Sino-Indian trade and commerce through Nepal.
While Kathmandu declined to accede to a formal extradition treaty with Beijing, it did sign a treaty on mutual legal assistance, a thinly veiled substitute.
Globally, the comments that got the widest play internationally were Xi’s warning that anyone who attempted to split any region from China would perish, “with their bodies smashed and bones ground to powder”.
Naturally, many were quick to link that warning to the protests in Hong Kong. If Xi had Tibet in mind, others wondered, why he would issue that warning in Nepal, which has consistently refused the Dalai Lama entry, and not in India which hosts the Tibetan leader as well as the Tibetan government in exile?
For Nepalis, there was an additional mystery. That section of Xi’s public pronouncements in Kathmandu was not conveyed by his official interpreter. The warning came in a Chinese Foreign Ministry statement issued in Beijing.
But, then, considering that very little is unscripted in Chinese officialdom, maybe that was a message from Beijing to third countries not to use Nepal’s instability and flux to foment unrest in Tibet amid the Dalai Lama’s advancing age and inevitable succession.
After all, Nepal’s northern Mustang district did serve as a base for CIA-backed Khampa rebels in the 1960s before the onset of the Sino-American rapprochement in the early years of the following decade.
Today, caught between the BRI and the United States’ Indo-Pacific Strategy, Nepal poses a peculiar problem for both its giant neighbors. They have deep and entrenched strategic differences that transcend those two issues but also have worked to boost cooperation in areas they consider mutually productive. More specifically, India and China realize that Nepal – through the auspices of third countries – has the potential to undermine the careful balance they have struck in their simultaneous quest for global leadership.
Amid its praise for New Delhi’s overall strategic autonomy in external affairs, Beijing has been careful not to challenge India’s core interests in Nepal. The two countries’ respective emphasis on cultural nationalism would find new ground for cooperation in Nepal, imbued as it is by Hindu and Buddhist traditions.
To be sure, such a Sino-Indian framework for stability – if what that is indeed – is embryonic. But it would be vital on a volatile front that is becoming increasingly so. Western powers, on the other hand, have invested too heavily in national re-engineering in Nepal in the name of enlightened and progressive transformation. It will take a long while for the dust to settle, if at all.

Nepal: ‘Indo-Pacific’ in History and Geography

US Secretary of State Mike Pompeo (R) meets with Nepal's Foreign Minister
Pradip Gyawali at the State Department in Washington DC
(Photo: US Embassy in Nepal)

By Sanjay Upadhya

If Nepalis seem a bit flustered at the way the United States now sees them as central to a free and open Indo-Pacific, you can blame their collective saga and surroundings.
Viscerally skeptical of their giant southern neighbor India, the ‘Indo’ part of the latest international relations fad carries heavy historical baggage. The ‘Pacific’ side is a geographical contrivance that might be partly redeemed by its connotation to Nepal’s other giant neighbor. But, then, containment of China remains the clearest implication of Washington’s assertive yet ambiguous formulation.
Nepali Foreign Minister Pradip Gyawali, back home from talks with US Secretary of State Mike Pompeo in mid-December, was prompted to issue a clarification. Nepal’s ‘central role’ in a free, open, and prosperous Indo-Pacific, as the State Department stressed in its official statement after the discussions, did not pertain to geostrategy. Pompeo’s focus was on how the US saw Nepal in a vital geographic region.
The resumption of direct high-level contact between the United States and Nepal after a 17-year hiatus itself was bound to generate much interest. The prevailing view in Nepal is that the United States took the initiative. That in turn brought back memories of early 2002, when then-Secretary of State Colin Powell made a hastily scheduled stopover in Kathmandu.
During that visit, Powell had largely bypassed the elected government to discuss directly with the Nepali monarch and generals on ways of strengthening the Royal Nepali Army’s capabilities in suppressing a decade-long Maoist insurgency. Washington, like Kathmandu and New Delhi, had designated the Maoists a terrorist group. Powell’s trip paved the way for an Oval Office meeting between President George W. Bush and Prime Minister Sher Bahadur Deuba later that year. Nepal’s entry into the global war on terror set in motion a chain of events that ultimately led to the abolition of the monarchy and triumph for the Maoists in multiparty elections.
The United States and Nepal have had a mutually beneficial relationship ever since diplomatic relations were established in 1948. The early decades were characterized by regular exchanges of high-level visits and US economic assistance in such key areas as health, education, infrastructure. Since the 1990s, the United States has focused on strengthening democratic institutions along with military engagement. In recent years, however, Nepalis have also sensed a proclivity on the part of the United States to subcontract its Nepal policy to new-found ally India.
In 2006, Washington, which still saw the monarchy as a bulwark of stability despite a royal coup, was dragged by New Delhi to back an agreement it had brokered between mainstream Nepali parties and the Maoist rebels, which ultimately led to the creation of a federal and secular republic. The State Department did not have to waste too many words to explain that although the Nepali Maoists were on its terrorist list, they were not in the same league as Al Qaeda.
Welcome as this renewed American interest may be, there are also reasons to be apprehensive. Much of Nepal’s post-2006 political evolution has been driven by Sino-Indian cooperation and conflict. Prior to the agreement, New Delhi had quietly engaged with Beijing on the imperative of a mainstream-Maoist alliance for stability in Nepal. China, a permanent member of the UN Security Council, and India, then serving a two-year term on the body, carefully cooperated to limit a United Nations political mission that oversaw the early phases of the Nepali peace process. New Delhi and Beijing subsequently worked to ensure the departure of the UN lest it replicate the staying power of its peace missions elsewhere.
In the aftermath of the devastating earthquake that hit Nepal in 2015, India and China quietly cooperated in immediate rescue and recovery, as many donors were deeper pockets dithered on issues of operations and accountability.
Sino-Indian engagement on Nepal has been a delicate balancing act. When India felt Nepal was veering too close to China, New Delhi imposed an unofficial economic blockade on the landlocked nation in 2015. Instead of succumbing to Indian pressure as it had during previous blockades, Nepal signed a series of agreements cementing comprehensive cooperation with China. While India recognized the agreements as immediately irrelevant, it saw their ominous portents over the long term.
China promptly reiterates its commitment to upholding Nepali sovereignty and independence when Nepalis experience India’s overbearing embrace. Yet Beijing has also deferred to New Delhi’s sensitivities, such as when Nepal cancelled Chinese projects that India deemed objectionable.
A sharp public display of Sino-Indian engagement on Nepal emerged on the sidelines of a regional conference in the Indian city of Goa in October 2016, when Chinese President Xi Jinping, Indian Prime Minister Narendra Modi and Nepal’s then Prime Minister Pushpa Kamal Dahal happened to be around the same area of their hotel lobby and decided to convene an impromptu trilateral summit.
Admittedly, much has changed since then. And much has remained the same, including the grudging recognition by India and China that they need to maintain their delicate balance in Nepal. India may find it difficult to see beyond its cultural, religious and social affinities with Nepal as China struggles to move past the reality that Nepal was the last tributary state to the Qing dynasty. But the Asian giants know they do not need another roadblock to their simultaneous rise.
Renewed American engagement with Nepal may excite India in terms of the broader contours of its relationship with the United States. Locally, it is bound to raise Indian apprehensions, as New Delhi assiduously avoids being relegated to a junior partner to Washington as well as raising Beijing’s suspicions.
The general ambiguity of Washington’s Indo-Pacific strategy may be a source of satisfaction to China, but it knows that it cannot afford uncertainty over US and Indian intentions in Nepal amid an aging Dalai Lama and the inevitable search for the next Tibetan leader. The 14th Dalai Lama has been living in exile in India since 1959 along with thousands of followers apprehensive of the future. The Chinese are too steeped in history to forget that Nepal once served as an important base for a US-sponsored Tibetan insurgency against China.
Such external undulations are bound to play out in Nepal’s cantankerous politics. The Nepali Congress, traditionally friendly to both Washington and New Delhi, was trounced in the last election and would be tempted to use any perceived deviation in Nepali foreign policy to undermine the government.
The ruling Communist Party of Nepal, an amalgam of Marxist-Leninist and Maoist parties, would relish an opportunity to extricate itself from the India-China straitjacket. Its more radical cadres, however, are not likely to appreciate their leaders hobnobbing with ‘imperialists’ at a time when the party is mired in factionalism.
The Nepali people, anxious for tangible economic and social benefits of democracy, may see in the new United States International Development Finance Corporation a source of some succor and sustenance, if history and geography leave them enough breathing space.